How IoT is driving business model change for the logistics industry

The Internet of Things (IoT) is changing the way whole industries run their businesses. And fast. Barely a day goes by without new insights causing people to stop and rethink the way their business operates.

And the logistics industry – with its fleets of lorries and vans that distribute every conceivable item on the planet – is no different.

GPS technology ensures that every vehicle can be tracked with pinpoint accuracy so that its whereabouts are always known. Dashboard cameras and security software mean that even out on the road, drivers and their payloads are given the duty of care and security they deserve.

But this only scratches the surface. The “game changer” for many is the data that an IoT-connected fleet of vehicles generates.

Data analytics providing new insights

One area is real-time, on-the-road fleet maintenance.

Modern diesel vehicles, for example, are fitted with a special filter that scrubs particulates from the exhaust. To work properly, they need to be brought up to temperature every now and then to complete the filtering process. 

Normally, this isn’t a problem. But for vehicles that operate in built-up areas that do a lot of stop-start journeys it can, if left unresolved, lead to problems including vehicle breakdowns.

IoT technology means that before a problem arises the office-based maintenance team is automatically notified of an issue even when a vehicle is out on the road. They can instruct the driver to get the vehicle up to the right temperature for the right length of time and receive notification once the exhaust system is clear and the problem resolved. 

It’s just one example of how vehicle fleets can now be maintained remotely based on accurate information rather than as a reaction to a costly fault. For those operating in industries that have yet to truly embrace IoT, it shows how detailed information is providing never-seen-before insights into how businesses operate.

Using IoT to drive greater understanding

That’s one of the reasons Fraikin Ltd — one of the UK’s largest providers of commercial vehicle contract hire, fleet management and rental solutions — decided to adopt IoT for its fleet.

From the moment Fraikin’s IoT technology was installed into its vehicles and switched on, it’s been collecting data — miles driven, fuel consumption, idling ratios, brake and tyre wear — and building up a picture of its fleet performance across more than 200 customers.

And as the data started to roll in, it started to pose all manner of questions. For instance, why the vehicles operating from one Glasgow depot are doing 30% less MPG compared to those in other logistics hubs. Figuring that out — along with all the other data that is being amassed — is changing the nature of every conversation that Fraikin is having with its customers.

Fraikin realised the industry was changing – and they had to change with it. But what of those logistics operations that have yet to embark on an IoT strategy?

Understanding the role of IoT

Like the management team at Fraikin, the first thing to recognise is the potential of IoT in changing how businesses operate. Pivotal to change is understanding the needs of each business and how IoT can make a difference.

While it’s possible for logistics operators to purchase standalone technologies such as driver cameras or connected tachographs, these tend to provide a short-term fix. Increasingly, logistics operators are looking for interconnected solutions that provide an overview of an entire fleet through a single screen.

What’s more, with technology adapting all the time, it’s important firms don’t get left behind. The ongoing volatility surrounding fuel prices, for example, has prompted many logistics firms to zero in on IoT to help manage costs, plan more fuel-efficient routes and monitor driver behaviour to better manage overheads.

As Mike Hemming, Technology Champion at Fraikin, explained to me: 

It’s about eliminating the guesswork and having complete confidence in the facts.

It’s possible that the search for greater fuel efficiency may be the reason a new wave of operators decides to adopt IoT for their business. Based on the experiences of the industry so far, it’s unlikely to be the only driver for change.